Whether you are planning your holiday abroad or you make some extra money as a street musician, sometimes you cannot avoid contact with a foreign currency. If you need to exchange Czech Koruna to euros, or the other way round, there are two options for you – approach a bank or an exchange office.
Banks vs. exchange offices
The official government’s statement is that banks offer advantageous exchange rates but relatively high fees, whereas many exchange offices boast with the well-known “0% COMMISSION” sign. The minimum trade amount is not limited, and when you exchange a seriously large sum of money, you can also reach an exceptionally favourable rate, the so-called VIP rate. The Ministry of Foreign Affairs of the Czech Republic even advises tourists to exchange their money in an exchange office since they might come across a bad exchange rate in classic shops.
Zero commissions. Really?
But there’s no such thing as an official statement. The reality is, in fact, the very opposite. Exchange offices usually charge fees and their rates are sometimes outright ridiculous – especially if you want to exchange only a small amount of money. Also, if you wish to exchange an excessive amount, sometimes you have to make a reservation in advance so that the office has enough foreign currency for you. (To make things clear, this is common in banks, too, for security reasons.)
As for the good piece of advice by the Czech Ministry of Foreign Affairs, sometimes it even pays off to buy a T-shirt in a shop in Prague for euros and has koruna returned in change. The T-shirt might, interestingly, cost less money than how much a tourist would lose on commission. Actually, the Prague situation is more specific than that.
Always pay attention to the exchange rate
The Czech national bank currently sets the exchange rate of the euro to 27 Czech crowns, but exchange offices set their own rates. Naturally, these rates tend to be lower as offices need to profit, too. Most of them are located in the center of Prague, which brings astronomically high tenancies the need to pay. This is why they withhold up to 28% – giving you less than three-quarters of your money’s actual value.
It is a shocking discovery that exchange offices use tourists’ trust or blissful ignorance and, in some cases, they rocket their commissions to over 40%. Sadly, it is absolutely legal since it is not within Czech national bank’s competence to determine fees or exchange rates for private merchants, which exchange offices undoubtedly are.
If the exchange rate is insane, negotiate or find another office
Surprising is also the fact that many exchange offices’ employees are willing to negotiate. After all, every trade is profitable for them, so with a little patience, you may lower the commission below ten per cent. In such case, your euro would be traded for quite an acceptable sum of 25 Czech crowns. In a kind of startling reality, however, exchange employees set fees and rates by their own choice. An online show called Prague vs. dough showed that Chequepoint, a British exchange company, runs several offices in London, but fees are more than twice as low than in Prague. Despite this, the company is considered a bunch of scammers and thieves by tourists visiting London.
Given such an unflattering assessment, it is obvious that an utmost caution is required when exchanging foreign currencies for koruna in Prague. If you have the chance, make sure to approach a banking company or pay by euro straight away.